European economy in intensive care

The world economy remains in 'intensive care' six years after the financial crisis kicked off. With underlying problems remaining unfixed, something has to give. In the good old days - i.e. the two decades before the credit crisis - markets of the developed world had broken away from the yoke of government.

The 1950's, 60's and 70's had seen Europe's growth stunted by the inefficiencies that come with central planning, nationalization, fixed exchange rates and general political meddling in economic affairs.

The subsequent lengthy boom of the 1980s and 90s was driven by several factors, including good demographics, the end of the Cold War and the technological developments.

Looking forward, its difficult to see any any replacements for these drivers. Today, the developed world is again being driven by what amounts to central planning, this time via interests rates and budget deficits.

Last modified on Wednesday, 31 July 2013 22:50

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